Bankruptcy and self-employment

Every business is unique with its own issues and complexities. Therefore it's hard for me to give advice on bankruptcy without knowing your specific situation. We recommend that you review your situation with one of our licensed insolvency trustees.

Deciding whether or not to continue being self-employed

Filing a consumer proposal or personal bankruptcy does not prevent you from continuing to be self-employed or starting a business. However, depending on your situation it may or may not make sense to continue being self-employed. In making this decision there are a number of considerations:

Is your business currently profitable?

Could your business become profitable through restructuring?

In order for us to assess your situation as accurately as possible, at our initial meeting we would ask you to bring along copies of your most recent financial statements and tax filings. If you do not have recent financial statements and/or there are tax returns outstanding, we can still help you get things cleaned up and use estimates to assess your situation.

Dealing with government debts

Most people are surprised to learn that government debts including income tax, HST and payroll source deductions owing can all be included in and discharged by filing a consumer proposal or personal bankruptcy just like any other creditor.

Government debts only have special rights if you do not deal with them. The enhanced garnishment provisions in the Income Tax Act and Excise Tax Act allow the government to freeze your bank, issue a requirement to pay to your customers, garnishee wages or put a lien on your house without a court order. Filing a consumer proposal or bankruptcy immediately stops all government action and prevents them from taking any further action against your assets and/or income.

My best advice would be to contact our office to arrange a FREE consultation with one of our licensed insilvency trustees to review your situation and discuss options.

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